WrittenAssignment3_HIS-114_RaymondMilek - Raymond Milek...

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Raymond Milek SID#0483682 11/17/2011 American History 2 HIS-114-OL Thomas Edison State College October, 2011 Semester Written Assignment 3 1) The Great Depression did not have its origins in the United States, even though its effects were deeply felt here. What were the major causes of the Depression in Europe and in the United States? Did President Hoover and the Republicans respond properly to the crisis or did their reaction cause further hardship for the American people? The Great Depression was a combination of many different events, both in Europe and in the United States. In Europe, World War 1 left virtually the entire continent in both financial and physical ruin. Great Britain and France both borrowed a mass amount of money from American banks to continue to fund their war needs. The amounts owed to the United States by these two nations were in the billions of dollars. Many other countries were left in worse condition, such as Germany. With very limited funds to support their own people, these countries had nowhere to turn but back to the U.S. to borrow more money. With the conditions of European countries after the war, along with the economic problems the U.S. experienced during the same period, the Great Depression was an inevitable calamity to occur. In the U.S., many people were borrowing and buying goods on credit. “By the end of the decade (the 1920’s), four out of five cars and two out of three radios were bought on credit” (Roark, and others, Pg.586). On top of “installment buying”, the term for buying on credit, many Americans were buying stock on margin—paying only partially at the time of purchase—with the expectation that the stock would increase in value. If the stocks did not increase in value, as expected, most buyers would not have the money to pay for the remainder of the price owed on 1
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the stock. After the stock market crash of 1929, the subsequent six months would see the market lose “six-sevenths of its total value” (Roark, Pg.587). Credit was not the only economic problem in America at the time. By mid-decade, new construction, automobile sales, and banks were all faltering (Roark, Pg.586-587). The southern and western farmers were suffering probably more than any of the impoverished American citizens. “Low prices and chronic indebtedness” had the average land-working family surviving off of a mere “$240.00 per year” (Roark, Pg.586). The industrial “boom” of the decade kept most of these issues in the dark, but much of the product output was unable to be purchased by the average consumer, by the end of the decade. The U.S. was suffering a great economic crisis after three decades of economic success, and someone or
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This note was uploaded on 03/18/2012 for the course HIST 114 taught by Professor ?? during the Spring '12 term at Thomas Edison State.

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WrittenAssignment3_HIS-114_RaymondMilek - Raymond Milek...

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